Background

The program requires insurers that offer exchange coverage to pay into a pool that can be used to reimburse them if they incur claims that exceed a certain threshold.

In June, HHS said it will reimburse 100% of such costs between $45,000 and $250,000, up from 80% previously (California Healthline, 6/18).

Details of Payments

Of the $8.7 billion collected by insurers nationwide during the 2014 benefit year, California insurers received $1.17 billion.

The insurers that received the largest reinsurance payments in the state were:

Anthem Blue Cross of California, with $401.1 million;

Blue Shield of California, with $363 million; and

Kaiser Permanente, with $240 million (Business Insurance, 7/6).

Meanwhile, California insurers also received more than $600 million in risk adjustment payments. Like the reinsurance system, the risk adjustment program is designed to keep rates consistent by allowing insurers to increase their enrollee pools without concern of incurring higher medical costs or enrolling sicker consumers.